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The Evolution of Humanistic Corporations

I was working at one of our office sites last month and found myself needing a Phillips-head screwdriver. Not surprisingly, no one in our office had a screwdriver. I thought about it for a while and decided to visit a neighboring business that I had never before interacted with. So I knocked on their door, introduced myself as their neighbor, and borrowed a screwdriver from them.

Upon completing my task and returning the screwdriver to them, I started to wonder why I hadn't "introduced" myself and my organization to them prior to needing something. My answer was that because they were a "corporation" and not a "person," I had not extended myself in a neighborly way. To put it more precisely, I had not behaved altruistically and acted on my humanistic values of interconnected welfare, dignity, sympathy, empathy, and compassion—in service of the alleviation of suffering and the amplification of joy in the world. Ouch!

This bout of reflection led me to ponder: In the U.S., what might the evolutionary path to humanistic corporations be?

To begin to answer this question I explored the history of corporations from the perspective of how the rights of legal "being-ness" (citizenship and personhood) are conferred. Spoiler alert: what follows does not describe particularly altruistic intentions or behaviors, and does not reflect humanistic values. This lack of altruistic-humanistic values and intentions has likely shaped the behavior of modern-day corporations and our relationships to them.

The Evolution of U.S. Citizenship

The U.S. Constitution initially provided that the states had the power to confer "citizenship," making its residents citizens of the U.S. "Citizenship," as defined by the several states, includes the right to serve as and vote for representatives of public office and obligations to the state of allegiance, such as payment of taxes. Initially, "citizenship" was limited to white, male landowners in many states, and subsequently was extended to children of Caucasian immigrants. In 1790, the U.S. Congress passed a naturalization act to define the naturalization process of citizenship. Citizenship was limited to "free white persons," including women.

In the 1857 Dred Scott v. Sandford case, the U.S. Supreme Court declared that African-Americans born in the U.S. were not and could not become U.S. citizens. The Civil Rights Act of 1866 granted U.S. citizenship to all persons born in the U.S. "not subject to any foreign power." What "not subject to any foreign power" meant was that foreigners, aliens, and children who belong to the families of ambassadors or foreign ministers could not be U.S. citizens. Arguments were made against including Native Americans and the children of Chinese and Gypsy immigrants.

The adoption of the 14th Amendment to the U.S. Constitution in 1868 overturned the Dred Scott ruling and conferred citizenship to African Americans and children born in the U.S. whose parents were not U.S. citizens and not foreign diplomats, stating that "all persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside."

The citizenship status of women was resolved in 1920 with ratification of the 19th Amendment of the U.S. Constitution. The citizenship status of Native Americans was partially resolved in 1924 with the Indian Citizenship Act, and finally resolved in 1965 with the Voting Rights Act. The citizenship status of U.S.-born Chinese was partially addressed in the early 1940s and was not comprehensively resolved until the Supreme Court ruled in 1967 against the constitutionality of anti-miscegenation laws.

The Evolution of Corporate Personhood

Corporate "personhood" emerged as an extension of thought regarding citizenship as defined by the 14th Amendment to the Constitution in 1868. Prior to that, corporations were artificial entities construed by the British government as an efficient organizational means to accumulate and control wealth for the Crown.

Significant litigation about the interpretation of the chartering of corporations by the states has been occurring since 1809. Initially corporations were "public serving" and had to serve a specified public purpose. Over time, this evolved into doctrines of corporate "personhood" where increasing "shareholder value" replaced "serving a public good." This evolution of purpose created the economic and social tension between corporate personhood and natural personhood.

In 1819, the Supreme Court recognized corporations as having the same rights as natural persons to contract and to enforce contracts. The Court expanded on this in 1886 by suggesting that the 14th Amendment's equal protection clause guaranteed constitutional protections to corporations in addition to natural persons. This suggestion was later codified, expressing that a legal entity—such as a non-profit, a company, an association, a firm, or a partnership, for example—must be treated under the law as a "person" except when otherwise noted. These legal entities were entitled to possess many of the same rights as an individual or group of individuals. These rights include the right to petition, to speech, to enter into contracts, to hold property, to donate to political activities, and to sue or be sued.

In 1888, the Supreme Court ruled that corporations were "associations of individuals united for a special purpose and permitted to do business under a particular name and have a succession of members without dissolution." This ruling granted corporations the right to exist in perpetuity, unlike their human counterparts. These rights did not include the right to vote or the right against self incrimination. Recent legal decisions, such as Citizens United v. Federal Election Commission, have arguably begun to expand the influence of corporate personhood on U.S. political and socio-economic processes.

The Evolution of Humanistic Corporations

When I reflect on how I live my non-corporate life to inform my corporate life, I am aware that it is all about relationships—family, friendship, neighbors, colleagues, and community. I am aware of my aspiration to cultivate the principles of Martin Luther King’s "Beloved Community," which cherishes the interconnectedness of all beings, preservation of human dignity, resiliency of the individual and the community, and behaviors that benefit from the contributions of others. I am aware that I must shed my biases borne of the socially corrosive history and evolution of corporations. I think that I must imagine something better that is relevant to today's world.

So I am beginning to imagine how my own attitudes and behaviors might change if I interacted with or within corporations from principles such as:

>> Practicing cooperation and exchange of information to build trust and discover shared aspirations and opportunities;

>> Building positive relationships between corporations, neighbors, communities, and markets based on mutual respect, understanding, and the recognition that their continued existence depends on their mutual health and well-being;

>> Acting as if corporations, neighbors, communities, and markets all benefit from maintaining a productive and sustainable environment; and

>> Solving market and neighborhood issues and problems at the local level by ensuring that local people work together.

I am curious about the impact on you regarding what I have written. What do you feel? What do you think? What do you observe? What are you curious about? What do you want? What are you committed to?

And I also hope you will share your thoughts by telling me what you think about:

The pros and cons are regarding cultivating humanistic corporations;

The humanistic principles behind our relationships with corporations and relationships between corporations;

What you think a humanistic corporation looks like in terms of individual and organizational health, harmony, and dignity;

What friendship and cooperation look like between corporations and organizations that do not do business together;

What you think would happen if "welcoming parties" were held for new corporate tenants in office buildings and neighborhoods; and

Comments and Discussions

There once was a humanistic corporate environment. It was called "Main Street" and every town had one. Shops and merchants and a cafe where everyone ate lunch and you could catch up on the latest gossip; the bank; Lions and Elks Clubs; City Hall where you could actually talk to your representatative.

Scale has everything to do with a humanistic business world and smaller works better. In fact, you don't even have to work it; it just emerges as a result of the smaller scale, physical proximity and inter-related nature of what used to be Main Street America.

I know, I grew up in such a place in such a time before the advent of shopping malls and big box stores. A different and more humanistic world in contrast to mega-business and Wal-Mart.

I did not grow-up in the embrace of "Main Street" America. I was born into segregated hospitals, neighborhoods, and schools. In my formative years my "urban" family was forced to live in a semi-rural area due to the prevalent and illegal practice of real estate "red-lining" in our neighborhoods of preference. My interaction with the corporate environment was strip malls and dominant city-based large employers. My parents lived in an era of segregated neighborhoods, restaurants, social clubs, and job opportunities. I conjecture that culture separates your experience from mine. Nonetheless, I sympathize with your sentiments and wish I had had opportunity to experience something similar.

So "scale" did not work for me as a child. And today, although I still live in a rural area surrounded by deer, horses, eagles, cows, and coyotes — my livelihood depends on people who work and live all across the U.S. (and the world in some instances). I am afforded the opportunity to live the life I live because I do and have belonged to "large organizations".

The world that I occupy is non-local and large. The work I do is to influence, and when feasible, lead large organizations so that I can inculcate humanistic values and practices in them. Hurst and Pugsley (2011) in their article entitled "What do small businesses do" note that in the U.S., 90% of all companies are small businesses with payrolls smaller than 20 employees, and roughly 60% of those small businesses employ 4 or fewer employees. Between 2000 and 2003, 80% of small businesses in the U.S. did not add a single employee to their payroll, and between 2007 and 2010 40% of small businesses failed. Large companies are defined as companies that employ more than 20 employees — and they employ 80% of all workers in the U.S. I am one of those "80%".

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So I ask you — and others who are willing to engage with me:

How does your scale down strategy actually address the world I live in?

How is a strategy that historically systematically excluded me from having equitable opportunities supposed to work for me?

What are you suggesting that might work for "all" regardless of the circumstances of their birth?

In a bizarre twist, this blog came out just as I was finishing a group proposal in our ethics course on the struggle between individual and organizational ethics. I appreciate the manner in which you've presented historical decisions that have protracted the often dysfunctional relationships between recognizing humans and recognizing corporations.

Love your post Mark as it speaks to the importance of being inclusive as we strive to improve the health of our organizations, communities, and natural environment. I don't think we can have healthy communities or a healthy natural environment without striving for more humanistic organizations/corporations. It is not hard to see the impact that unhealthy life inside organizations has on individuals, families, and communities. Children need healthy parents to grow into healthy adults.

Also important, as you note, is to consider how we foster relationships between organizations and the people that work within them. The work of inter-organizational networks which I have written about in this blog recognizes that we cannot build healthy communities without partnerships across organizations. Marvin Brown, one of our faculty members suggested that we at Saybrook organize a block party and invite all the organizations that are in the area, just to build relationships and see what emerges from conversations about how to contribute to a healthy city.

I am inspired by the idea of a Saybrook-organized "block party" in San Francisco.

So inspired in fact, that I am wondering what an intra-Saybrook "virtual block party" would be.

It seems to me that there is a complex network of geographically dispersed constituencies in Saybrook such as: individual students; students in learning communities; and students in colleges and programs; faculty in programs, departments, learning communities, centers, and colleges; and staff and administrators supporting "Central Casting", centers, colleges, departments, and programs.

In such a complex distributed entity as Saybrook University, what does humanistic behavior look like and how is it initiated, cultivated, and sustained?
What is the value proposition for each constituency of Saybrook in embodying humanistic values and practicing humanistic behaviors?
Is a Saybrook "virtual block party" a reasonable beginning?

Where is the energy (passion) in the system to begin and sustain such an endeavor?